On 16 February 2023, the Zakat, Tax and Customs Authority (ZATCA) published a guideline outlining the requirements of a two-stage process for non-resident businesses to submit refund applications for Value Added Tax (VAT) incurred on supplies. Although this process has been available in the law since the inception of VAT in the Kingdom of Saudi Arabia (KSA), it has only recently come into practical force.
The publication of this guideline is good news for non-resident businesses that have incurred VAT on costs in KSA as the claims process is now up and running.
We have a dedicated team of KSA VAT refund experts within our Tax practice. We have successfully assisted businesses to apply for, and obtain the Eligible Person status from ZATCA. This is the first step for the businesses to recover the accumulated VAT and to optimize the absolute cash position of the business.
Given the relative novelty of this procedure our experience has shown that close liaison with the tax authorities is important. Considering the complexity of the process, and the information that will need to be gathered, coupled with the fast-approaching deadline, we suggest that businesses should start early in order to ensure that the refund application is submitted before 30 June 2023.